You are outside counsel to the Marcus Welby Healthcare Corporation, which among its other operations owns a durable medical equipment (DME) subsidiary, which sells equipment for home use such as crutches, wheelchairs, and oxygen concentrators. You learn that the subsidiary has had certain business practices about which you have some question under the Medicare and Medicaid Anti-Fraud and Abuse provisions:

• Salesmen regularly offer home health agency employees a "premium" whenever their clients order DME from the subsidiary.

• The subsidiary offers "rebates" to patients who use its equipment.

• The subsidiary pays hospital and home health agency personnel for assisting its patients in learning how to use its products.

• Some arterial blood gas test results may have been "massaged a bit" by the DME in order to facilitate Medicare payment for oxygen concentrators.

What advice would you give?

Answer:

When anoutside counsel to the Marcus Welby Healthcare Corporation, owns a durable medical equipment (DME) subsidiary, which sells equipment for home use such as crutches, wheelchairs, and oxygen concentrators. I will advise them that Supplier Standards Medicare regulations have shown standards that a seller of hospital equipments must meet to receive and maintain a supplier number. That supplier should  certify in its application for billing advantages that it meets and  continue to meet the standards below

The following is a summarised version of the supplier standards:

 1. A supplier should be in compliance with all Federal and State licensure and regulatory requirements.

2. A supplier should give a  complete and accurate information on the DMEPOS seller application. Any alterations to that  information must be reported to the National Supplier Clearing house within 29 days.

3. An authorized individual must sign the application for billing advantages.

 4. A supplier should  fill orders from its own inventory. He may not contract with any entity that is currently excluded from the Medicare program, any State health care programs, and  from any other Federal procurement or non procurement programs.

 5. A supplier should  advise beneficiaries that they might rent or purchase inexpensive or routinely purchased durable medical equipment, or  of the purchase option for  rental equipment.

6. A supplier should  notify beneficiaries of warranty coverage and honour all warranties under applicable National law, repair or replace free of charge Medicare-covered items that are under warranty.

 7. A seller should maintain a physical facility on an appropriate site and time.

8. A supplier must allow  CMS or its agents to conduct on-site inspections to confirm  the supplier's compliance with the above  standards. The supplier avalailabity must be accessible to beneficiaries during business hours, and should maintain a visible sign and posted hours of operation.

9. A supplier has to maintain a primary business telephone listed under the title  of the business in a local directory ao either  a toll free number available through directory assistance.  

10. A supplier must have comprehensive liability insurance in the amount  that covers both the seller's place of business and all customers and employees of the supplier.